Behind every successful company is a series of lessons learned the hard way, and Clifford Lerner's very own startup wasn't spared from that. Almost on the verge of losing money, Cliff Lerner's online dating startup, Snap Interactive, bet its fortune on the then-unknown platform Facebook - and to good results. Now, as the stock price skyrocketed 2,000, the company gained not just some other growth, but an explosive one, becoming the first online dating app that ultimately grew to 100 million users.
Cliff recently published the #1 Best Seller Business Book, Explosive Growth: A Few Things I Learned While Growing To 100 Million Users & Losing $78 Million, which is available on Amazon and as an Audiobook. Check out the Explosive Growth book website to get more growth content including his viral marketing playbook and his favorite books for entrepreneurs.
Curious? Let's find out where the magic happened:
How did it all began:
Everything all started with a call for more creativity and difference. Formerly working at the ever-demanding, most sought-after Wall Street, Sergio had to leave his lucrative career to try his odds by launching his own online dating startup – a strong example of both risk and standing out from the rest.
Image credits: explosive-growth.com
The “explosive” in explosive growth: how it happened
In a stark contrast to the present times, Facebook was then an unknown platform – but this didn’t stop Clifford from taking a huge risk, later on becoming the most dangerous, yet also the best decision he’s ever made. “The catalyst was being very early on the Facebook application platform, and figuring out how to go ‘viral’,” the founder and author said, “We probably had gotten only a few thousand users in 2 years prior to that, and were a few months away from running out of cash. Then we took a chance on Facebook (which was unknown at the time), and got 10 million all for free in less than a year, and grew from there.”
Facebook, the right gamble:
Betting your startup’s fortune to a fellow unknown platform is no child’s play, but Clifford, by all the right reasons, knew that Facebook is the right gamble. He shared three, distinctive values as to why Facebook is worth risking his budding company on:
1. 10x Better/Faster Sign Up Process: Creating a profile and uploading photos on other dating sites was a several minute and tedious process, with Facebook it was 1-click. This was more like a 100x better experience.
2. 10x Better/Detailed Profiles: On other dating sites, users weren't creative and the profiles were boring and get stale. On Facebook, with 1-click you could import all of your interests, photos, etc, and it updated regularly.
3. 10x Better User Experience With Friends: On existing dating sites, the concept of showing mutual friends didn't exist. However, most people in real life meet their significant others through a friend. So, the ability to take an action that people were doing in real-life, and use technology to make it 10x better and more efficient was very compelling. This was also a 'purple cow' at the time.
Loss before gain: how he lost $78 million
Snap Interactive might have been drowning with their current 10 million users by now, but before getting into this status, the company first has to lose a great deal of money. And by great deal, we mean 78 million worth of dollars! How did it happen? One thing – Clifford refused to sell a share of his startup during its peak, losing a value of his holdings well over $80 million. “The company was publicly traded and in December 2010, an article came out about us touting our growth,” Clifford recounted, “The stock price went up from around $0.10 to over $4.00 over the next couple of weeks and stayed around those levels for a while. I never sold a share until several years later after it had declined over 95% all the way back down.”
Image credits: explosive-growth.com
On adjusting to market demands:
The internet has been swarming with new online dating platforms every day; Clifford isn’t new to that. As network effect businesses, a setup wherein users only get value if there are thousands of other users they can interact with and new users joining every day, online dating sites compete with each other every single time. Clifford solves the problem of adjusting to the ever-changing market demands by dropping several tips:
1. Gain a critical mass of users.
2. Build a strong brand with a unique differentiator.
3. Always be innovating.
4. Never be complacent – that’s where things will start going downhill.
2. Build a strong brand with a unique differentiator.
3. Always be innovating.
4. Never be complacent – that’s where things will start going downhill.
Explosive Growth
Cliff recently published the #1 Best Seller Business Book, Explosive Growth: A Few Things I Learned While Growing To 100 Million Users & Losing $78 Million
Image credits: explosive-growth.com